Exxon Mobil seeks permit for Point Thomson pipeline

Posted: Wednesday, July 24, 2002

ANCHORAGE (AP) -- Exxon Mobil Corp. has applied with the state for permits to build a 22-mile pipeline to carry natural gas liquids out of the Point Thomson field on the North Slope.

The application is another indication that Point Thomson, discovered in 1977, might finally be on the way to development.

However, Exxon Mobil officials have emphasized in recent speeches that plans are preliminary and no final decision on developing the field will be made until early 2004.

The new pipeline would stretch from the Point Thomson field west for 22 miles, tying in with the operating Badami oil field, which already is connected by a pipe to the trans-Alaska oil pipeline. Point Thomson borders the Arctic National Wildlife Refuge and is about 60 miles east of Prudhoe Bay, the largest oil field in North America.

Development of Point Thomson is one of the most eagerly sought new oil and gas projects in Alaska. It's development could mean hundreds of temporary construction jobs, 50 permanent operations jobs and some $2.5 billion for state and local governments over the field's life, Jack Williams, Alaska production manager for Exxon Mobil, has said.

Exxon Mobil is the main owner of the field with partners BP, Chevron Texaco and Phillips.

The state has, for many years, prodded the oil companies to develop Point Thomson, which holds more natural gas than any other North Slope field except Prudhoe Bay. Last year, Exxon Mobil and the state struck an agreement whereby the companies would forfeit millions of dollars and rights to thousands of acres unless they drill several exploration and production wells at Point Thomson by 2008..

An Exxon Mobil subsidiary, Houston-based Exxon Mobil Pipeline Co., filed its pipeline application on July 17 with the state pipeline coordinator's office in Anchorage. The company seeks a 100-foot-wide right of way along the length of the nearly 13-inch pipeline, which would cross state lands. The pipe would cross 16 creeks or streams, according to the application.

Exxon Mobil officials have said the total ''footprint'' for an operating Point Thomson field would be no more than 225 acres.

If developed, Point Thomson wouldn't be an oil field so much as a liquid natural gas field. Exxon Mobil proposes an expensive and technically daunting project that would involve ''cycling'' natural gas -- bringing it to the surface, capturing the condensate or gas liquids, then pumping the ''dry'' gas back down holes for storage underground.

Engineers believe Point Thomson holds 8 trillion cubic feet of gas and 400 million barrels of condensate, which is actually more valuable than crude oil because the liquids need less refining to make high-value marketable products.

Williams, in a recent speech, cautioned that Exxon Mobil hopes the permitting process goes smoothly and quickly. A lot of snags ''could very well kill this project,'' he said. Some 40 local, state and federal permits are needed to develop the field, Williams said.

About $800 million already has been spent on Point Thomson, with another $1 billion needed, he said.

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